Italy's eurosceptic candidate for economy minister seeks to reassure president

4 Min Read

* President so far has blocked Paolo Savona’s candidacy

* Savona has been critical of the euro and the EU

* Coalition parties have given president ultimatum

* If proposed cabinet rejected, it may open way for new vote

By Stephen Jewkes and Steve Scherer

MILAN, May 27 (Reuters) - The eurosceptic professor whom Italy’s would-be coalition partners want as their economy minister sought on Sunday to allay concerns about his views on the European Union, which have held up the formation of a government.

President Sergio Mattarella has so far refused to accept 81-year-old economist Paolo Savona for the pivotal post, stymieing efforts to end a political deadlock that has dragged on since an inconclusive election in March.

Formally, the president must endorse Prime Minister-designate Giuseppe Conte’s proposed list of cabinet ministers. Conte, a little-known law professor with no political experiences, met the president on Friday without resolving the deadlock.

On Saturday, the far-right League party and the anti-establishment 5-Star Movement stuck by Savona, challenging Mattarella to accept him or risk another election later this year.

Savona has been a vocal critic of the euro and the European Union, but he has distinguished credentials, including as industry minister in the early 1990s.

“I want a different Europe, stronger, but more equal,” Savona said in a statement on Sunday. It is the first time he has commented publicly on the matter.

Last week Savona’s known criticism of the euro and German economic policy further spooked financial markets that were already concerned about the future government’s willingness to reign in the country’s massive debt, worth 1.3 times its annual output.

Outgoing Economy Minister Pier Carlo Padoan said on Sunday that the problem was not Savona, but the coalition’s economic plan, which is “clearly unsustainable”.

Padoan also said the parties should have vocally ruled out a proposal put forward in Savona’s most recent book, which said Italy should draw up a “plan B” for the country to leave the bloc with as little damage as possible if it should prove necessary.

Padoan, who was interviewed on RAI state TV, was read a note from Savona, a personal friend, by the interviewer: “Padoan has been a great minister, and I’ll tell him so myself should I become his successor.”

In his statement, Savona said his position on debt was the same as that forged by the potential coalition allies in their programme - which says it will be reduced not through austerity or tax cuts, but through targeted investments and policies that boost economic growth.

Savona has had high-level experience at the Bank of Italy, in government as industry minister in 1993-94, and with employers’ lobby Confindustria. But his critical stance on the euro has been the focus of concern.

In Sunday’s statement, Savona did not refer to his opinions on the euro, but more than 70 slides outlining a “plan B” for Italy’s exit from the euro, co-authored by Savona in 2015 with a dozen others, circulated on social media on Sunday.

Meanwhile, Conte was waiting to be summoned by Mattarella.

If the president continues to veto Savona, the risk is that the deal holding together the two rival parties, which won the most parliamentary seats in the March vote, will fall apart, making another election this year likely. (Reporting by Stephen Jewkes; Editing by Susan Fenton)